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2020 januárjától a MT/DP Műhelytanulmányok és a Budapest Working Papers sorozat egybeolvadt, és a továbbiakban KRTK-KTI Műhelytanulmányok cím alatt közli az intézet kutatóinak tudományos munkáját. A KRTK-KTI Műhelytanulmányok célja, hogy hozzászólásokat, vitát generáljanak, nem mentek át szakmai ellenőrzésen.

Szerkesztő: Hajdu Tamás

A megszűnt sorozatok tanulmányai az alábbi linkeken érhetőek el:

MT/DP műhelytanulmányok

BWP műhelytanulmányok

Health Shocks, Social Insurance, and Firms



We study the role that firms play in social insurance benefit uptake after their workers experience health shocks. Social insurance in our setting, Hungary, is universal and comprehensive, thus allowing us to quantify the impact of firms on benefit uptake and labor market outcomes on top of the social safety net. Using matched employer-employee administrative data linked to individual-level health records, we find that firm responses to worker health shocks are heterogeneous: workers hit by a health shock at high-quality firms are less likely to take up disability insurance or exit the labor force than those at low-quality firms.


Regional resilience and the network structure of inter-industry labour flows



This paper explores how the network structure of local inter-industry labour flows relates to regional economic resilience across 72 local labour markets in Sweden. Drawing on recent advancements in network science, we stress-test these networks against the sequential elimination of their nodes, finding substantial heterogeneity in network robustness across regions. Regression analysis with LASSO selection in the context of the 2008 financial crisis indicates that labour flow network robustness is a prominent structural predictor of employment change during crisis. These findings elaborate on how variation in the self-organisation of regional economies as complex systems makes for more or less resilient regions.


What makes a new doctor better? Effects of new primary care physicians on healthcare provision



Using individual-level administrative panel data of all diabetic patients in Hungary for years 2010-2017, we analyze the effects of primary care characteristics on healthcare provision in rural areas by exploiting the change of the person of the general practitioner (GP), be it a temporary substitution or a permanent new doctor. We estimate event study models and focus on three mechanisms: (1) discontinuity of care itself, (2) changes in physician’s practice style and (3) changes in local healthcare supply conditions. We find that discontinuity of primary care has a significant positive effect on treatment (as measured by the quarterly probability of outpatient care use, glycated hemoglobin testing and statin use), but only if the new doctor is a permanent one. Treatment style matters: while male or older GPs have close to zero impact on most of the healthcare variables listed above, the effect of the new GP being female and being younger is 2-4 %points; we also find some evidence of the interaction of the gender of the doctor and the patient affecting treatment. Finally, local healthcare supply conditions such as practice size do not influence significantly the variables in our case.


Economic Preferences across Generations and Family Clusters: A Comment



Chowdhury, Sutter and Zimmermann (2022) assessed the risk, time, and social preferences of family members in rural Bangladesh, presenting two main findings. First, there is a strong and positive association between family members’ preferences, even when controlling for personality traits and family background. Second, families can be grouped into two clusters: approximately 20% of the families are characterized by relatively impatient, risk-averse, and spiteful members, while the rest of the families have relatively patient, risk-tolerant, and prosocial members. Recognizing the pivotal role of cluster analysis in deriving the second result, we first successfully computationally reproduced the results, and then we conducted two types of robustness checks. The first examines the transformation of variables (continuous or categorical), affecting the proximity measure that is crucial to cluster analysis. The second assesses the effect of varying the number of clusters on the findings. Some results are robust, as we consistently find the small cluster of families identified by Chowdhury et al. (2022). However, divergent outcomes emerge with categorical variables (a logical choice given their nature) and a larger number of clusters (3 or 4). We conclude that, although the cluster analysis by Chowdhury et al. (2022) is valid, its outcomes significantly depend on the researcher’s assumptions and choices. Careful consideration of several alternatives is essential in exploratory cluster analysis to identify stable groups.


Endogenous language use and patience



The linguistic-savings hypothesis posits that the grammatical marking of future events in languages is linked to future-oriented behavior. Recent experimental studies have suggested patience as a possible mechanism connecting language use and future-oriented behavior by exogenously manipulating what language is used. Our paper explores the association between patience and the language that people naturally use, thereby building on endogenous (as opposed to exogenously manipulated) language use. To capture natural language usage, we utilized a novel sentence-completion task designed for native speakers of the Hungarian language. This language allows for referencing future events through both present and future tenses. We hypothesized a positive correlation between being patient and using the present tense to refer to future events. We conducted incentivized and non-incentivized experiments with four independent samples of high school and university students, involving nearly 3,500 students in total. We find no consistent evidence that patience is correlated with endogenous future-time reference. Our null finding is further supported by a robustness check that leverages specific randomness in our data.


Family foster care or residential care: the impact of home environment on children raised in state care



This paper investigates how the type of home environment – family foster care or residential care – affects the adult outcomes of individuals who were raised in state care during adolescence. While it is established in the literature that living in residential care is detrimental for babies, the effect of living in different types of care as an older child is underexplored. We use Hungarian individual-level administrative panel data and follow the children from age 13 until age 19. We show that the adult outcomes of adolescents who grew up in a foster family are substantially better even after controlling for a rich set of variables, including indicators of cognitive and non-cognitive skills, and mental problems observed at age 13. Young adults who grew up in family foster care are 8 percentage points more likely to complete secondary education, and 11 percentage points less likely to spend at least 6 months without either working or studying at age 19, than comparable peers raised in residential care. Using mental health medication is 5 percentage points less likely. For girls, the probability of teenage birth and abortion are smaller by 12 percentage points each. IV estimations using local foster mother capacity as an instrument reinforce the beneficial effect of family foster care.


Statistical overstatement of average wages and its impact on pensions: the case of Hungary



In Hungary, initial pensions are indexed to average net wages, reported by official earnings statistics (ES), which does not cover the economy as whole. However, there is alternative statistical source on labour income, the national accounts (NA), intended to cover the total economy. The latter indicate a markedly lower rate of growth in wages than the ES for the period between 2010 and 2020 (4.9 vs. 1.9 percent increase in real gross wages per year). Relying on feasibility tests, we show that the rapid increase reported by the ES cannot, while the milder growth shown by the NA can be reconciled with relevant macroeconomic developments, e.g., changes in productivity and household consumption. We, therefore, claim that the ES overstated the actual increase in wages at the national level during the 2010s, and make our own calculations regarding the path of net wages and implied (hypothetical) initial pensions. The main implications of this exercise are the following: (i) the actual increase in initial benefits (linked to net wages, as reported by the ES) was excessive; (ii) in our estimate, the ratio of average benefits to average net wages did not fall by the extent shown by official statistics (the former is linked to the increase in prices, rather than that of wages). Moreover, (iii) the accumulation of major tensions between cohorts retiring in subsequent years might have been reduced by relying on the more plausible wage statistics reported by the NA, and by taking into account the impact of the dramatically reduced social contribution rate (paid by employers) in calculating initial benefits.


John von Neumann’s game-theoretic legacy



John von Neumann (Budapest, 1903–Washington D.C., 1957) was an exceptional polymath, who made fundamental contributions to mathematical logics, functional analysis, quantum mechanics, game theory, computer architecture and automata theory. In this brief paper, I shall review the game-theoretic results of von Neumann and their legacy in an informal way.


Comparative analysis of the evolution of the CE4 countries’ national innovation systems and their innovation performance in 2000–2020



This paper compares the evolution of CE4 countries’ (Czechia, Hungary, Poland, and Slovakia) national innovation systems, as well as their innovation performance. Its analytical framework draws on evolutionary (and institutional) economics of innovation.

Given the structural features and the level of socio-economic development in the CE4 countries, as well as the dominant way of thinking since the cold war, Western politicians, business people, analysts and journalists tend to share a ‘block’ view of these countries. Further, there is a noticeable – and certainly understandable – ‘drive’ also from the academic community to produce findings that can be generalised across the new EU member states, but at least for the CE4 countries, that is, to focus on identifying shared or similar features. Yet a closer look at the structure of the national innovation systems in these countries, as well as at their innovation performance, points to a different direction. While the structural composition of the research sub-systems of the CE4 countries showed a great diversity already in 2000, fairly significant changes have occurred since then almost in all countries, adding more colours to the observed diversity. Neither a similar structural composition of the research sub-system can be observed, nor a move towards a similar structure. Their innovation performance is also diverse.

Given the diversity among innovation systems, one should be very careful when trying to draw policy lessons from the ‘rank’ of a country as ‘measured’ by a composite indicator. The CE4 countries, therefore, need to avoid the trap of paying too much attention to simplifying ranking exercises. Instead, it is of utmost importance to conduct detailed, thorough comparative analyses, identifying the reasons for a reasonable or disappointing performance.


Futures of the interpenetration of criminal and lawful economic activities in the European Union in 2035: Scenarios and policy implications



Policy-makers – working on various domains, notably regulations, home affairs, security, science, technology, and innovation (STI) policies – need to pay close attention to possible new ways and methods for the interpenetration of criminal and lawful economic activities. This paper is aimed at assisting these policy-makers by presenting four possible futures (scenarios) on the interpenetration of criminal and lawful economic activities and considering their implications.

These scenarios assume that the interpenetration of criminal and lawful economic activities – just as most other types of crime – cannot be fully eradicated. There are two competing groups of actors whose capacities, activities, and efficiency largely determine the possibilities for, and repercussions of, the interpenetration of criminal and lawful economic activities: criminal actors and law enforcement agencies (LEAs). The scenarios, therefore, are shaped by two main dimensions: i) whether LEAs are well-resourced, strong, and effective or not, and ii) whether large criminal organisations or small-scale ones are the dominant criminal actors. Hence, the four scenarios consider various types of ‘push’ and ‘pull’ factors that influence actors to commit – or not – criminal economic activities; the main types of these activities; features of regulations; research, technological development, and innovation activities by the criminal actors vs LEAs; as well as the activities, capabilities, and resources of LEAs.

By considering the nature of the criminal activities that aim at penetrating lawful economic activities, and the options to prevent, monitor, and fight these crimes, the report explores a range of policy implications, especially for STI policies and regulations. Further, it stresses the multi-level nature of policy-making in the EU, as well as the need for collaboration with the willing countries outside the EU. Criminal actors can penetrate lawful economic activities in the EU when commissioned by hostile (‘rogue’) states that aim to weaken and/or undermine the EU and its Member States as part of their geopolitical power games.


Does cutting the value of unemployment insurance benefits affect take-up? Evidence from Hungary



Does a drastic cut in in potential benefit duration affect the take-up of unemployment insurance benefits among those eligible? We evaluate a policy change reducing the maximum length of UI benefits from 9 to 3 months in Hungary at the end of 2011. We rely on rich longitudinal matched administrative data, which allows us to obtain information on a large sample of job losers, and precisely estimate eligibility for UI benefits. We find that slightly less than 60 percent of UI eligible individuals claim benefits, and that while the length of benefit entitlement is only slightly positively correlated with taking up benefits, UI claiming rate tends to increase with previous earnings. We show that the proportion of UI benefit claims fell only slightly (by 1.5 – 2 percentage points), but this effect was more pronounced for those with the largest potential losses in UI value. This moderate effect might be related to the fact that the reform essentially got rid of the period of flat-rate UI benefits, while keeping the period when UI benefits were proportional to previous earnings roughly unchanged.  At the same time, UI take-up decreased among those with low earnings (around the minimum wage) but stable employment, a group with likely little savings, which is alarming from a social policy perspective.


Corruption Risk and Education at Regional Level



In this study, we investigate the correlation between corruption risk and the level of education in European sub-national regions (NUTS2 level) between 2006 and 2020 in 16 member countries. We use the data of Tenders Electronic Daily (TED) covering the parameters of 6,766,274 public procurement contracts in total and NUTS2 level Eurostat data. We found that higher educational attainment is associated with lower corruption risk and a higher level of control of corruption, indicating that better-educated locals may force authorities to limit corruption risk as they have less tolerance for corrupt behavior. In addition, the results point out that the increasing level of education is associated with a decreasing level of corruption risk. Our study contributes to corruption research by using objective indicators characterizing the NUTS2 regions of some European countries.